Tax Debt Loans in Australia

Using property equity or other assets as security against loans to pay tax debt can significantly reduce your regular borrowing costs.

Here, we’ll look at some recent Agility case studies, see how a private mortgage manager unlocked ATO debt funding options, and examine why secured tax debt finance is more cost-effective than unsecured solutions.

Even if you already have an ATO tax debt payment plan in place, that doesn’t necessarily prohibit your business from seeking out more cost-effective loans for tax debt. While not every financier will consider an application, others, including private mortgage managers like Agility, will look further than your debt and attempt to identify ways that you can reduce the ongoing costs.

Many businesses can significantly improve their overall situation by putting assets or property equity to work – and we believe that when a funding solution puts you in a stronger financial position, it constitutes a superior funding solution.


Unsecured tax debt loans in Australia can prove costly to maintain. At Agility, we’re experts at finding better loans to pay a tax debt. That could mean using secured tax debt consolidation loans to reduce costs and simplify day-to-day operations for some businesses. For others, it might mean using tangible assets or commercial property equity to tackle cash flow problems. Every company has one thing in common, better loans for tax debt are loans that play to their strengths and cost less to service.


Tax debt loans in Australia: Why Agility is Different

While tax debt is a feature of business at the best of times, the events of the last few years have seen many more Australian companies encounter problems. In some specific circumstances, such as if your business is asset-poor and you don’t own or use premises, an ATO payment arrangement could offer a logical lifeline. However, an ATO payment plan is rarely the best or most cost-effective solution if your business has commercial property or plant and machinery assets.


Agility has a long track record of helping Australian companies with tax debt loans, and after the onset of COVID-19, that activity has intensified. Different businesses have various challenges and advantages, but leveraging equity typically solves immediate problems. After a fruitless search, many business owners and directors come to us, but Agility works differently from banks and traditional lenders. Our unique position and expertise in business growth to manufacturing, property development, and construction allow us to consider equity in business assets, commercial property, and even residual stock in construction projects.


Not every business has enough equity or assets to cover an entire tax debt, which isn’t necessarily prohibitive to reducing costs. The main aim of tax debt consolidation loans is to reduce costs, and clearing part of your ATO payment plan with a secured tax debt loan will likely achieve that. Once we’ve identified a way to do that, businesses can renegotiate plans and either reduce the term or monthly outgoings, removing cash flow pressure. It’s also likely that putting alternative finance in place will reduce the risk of further ATO penalties, which can significantly drain resources.


In Australia, tax debt loans can help many different businesses overcome an increasingly common problem. This article will look at several case studies to illustrate how Agility helps other clients. Examples cover various situations and all feature loans to pay a tax debt. Here at Agility, we don’t just focus on your business problems – tax debt or other issues – but also consider your business positives. For some, that could be dealing with funding challenges amid a booming property development sector, with projects ready to go. For other businesses, a tax debt might be compounding the challenge of the aftermath of what’s been a very long pandemic. Whatever your situation, here at Agility’s primary aim is to help Australian businesses turn their strengths and advantages into more cost-efficient, workable finance options.


Tax debt loans in Australia: Using assets to secure finance

If your business doesn’t have access to real estate or property development equity, you may still be able to reduce the costs of paying a tax debt loan or ATO payment plan. Though many businesses are cash-poor, they hold assets. For instance, transport and logistics firms may have vehicles. Agricultural companies might have sizeable investments in the form of machinery. And manufacturing firms have specialist plants, too. Where that’s the case, Agility can help businesses unlock those assets to make borrowing cheaper for a host of purposes like tax debt loans, R&D loans, growth finance, and even finance for launching new products.

Employing assets to secure tax debt loans means paying a marginally higher interest rate than if businesses use property equity to ensure tax debt. However, it remains far more cost-effective than using unsecured tax debt loans or ATO payment plans.
Here’s how Agility recently helped a civil contracting company in Melbourne with a tax debt:


Secured Loans to Pay Tax Debt: Using machinery assets

A civil contracting business in Melbourne contacted Agility with substantial tax debt. The company enjoyed an upturn in business after COVID-19 and had two major projects already underway. Although business was good, the subsequent drain on cash flow made it difficult to service an $900,000 ATO payment plan.
The bank had just increased pressure by calling in a maturing commercial construction loan. That’s when the company contacted Agility for assistance.
First, we looked at everything the bank would. We examined the business, its directors, and its credit history. Crucially, though, we also considered several other factors, like ongoing contracts and valuable machinery assets. After a thorough examination, we raised enough secured borrowing to clear out the bank completely.
The resulting $600,000 in finance allowed the company to renegotiate a cheaper payment plan with the ATO. The directors chose to pay lower monthly costs over one year instead of two. Cash flow subsequently improved, and the business was able to honour ongoing contracts without the threat of further ATO sanctions.

Tax debt consolidation loans: Using the equity in personal property to pay a tax debt

Many Agility clients have relatively sizeable tax debt and an expensive payment plan with the ATO, but that’s not always unavoidable. Even if your business doesn’t have assets or equity in commercial property, there are other ways to reduce the regular costs of servicing tax debt.

It’s possible to significantly reduce monthly outgoings by using personal property equity as security against a tax debt loan.

Here’s how Agility worked with one client to achieve just that:

Loans to Pay Tax Debt: Using personal property equity as security for a tax debt loan

Our client was a successful lawyer with a thriving practice in Brisbane. She contacted Agility with a tax debt of $500,000, hoping to identify a more cost-effective solution than her current two-year ATO payment plan.
Agility discovered that, although the client still had a relatively high LVR on her primary residence, she also owned a holiday apartment on the Gold Coast. That secondary home represented a significant asset, with the lawyer owning almost 80% of the property.
As a result, Agility put secured tax debt finance in place, utilizing the equity in the Gold Coast apartment. We raised $400,000, and the client was able to renegotiate a one-year payment plan with the ATO, which saved her thousands of dollars each month.

Using the equity in residual stock as security against loans for tax debt

Often, the difference between prohibitive and cost-effective finance is the way banks and traditional lenders assess borrowers. Businesses like property developers typically see capital tied up in projects over relatively long periods. For that reason, property developers are prone to cash flow issues, and tax debts are just one area where they might require a financing solution.

At Agility, we believe finance works best when it’s designed to match the needs of individual borrowers and the unique challenges of different industries. Loans for construction and property development ideally should be tailor-made for specific projects. When that happens, beyond just tackling issues like tax debt, property developer clients experience fewer of the sector’s everyday problems, reduce setbacks, and often substantially improve profits and operations.

Here’s how we helped one such developer:


Tax debt loans in Australia: How Agility helped a property investor

Agility took a call for help from an experienced property investor in New South Wales with somewhat problematic tax debt. Events had conspired to leave the developer in a slightly sticky and costly situation with the ATO. Business on the Central Coast was hectic, with one housing development almost complete and a profitable new apartment development ready to begin. The developer had just put a DA in place on that project and was desperate to get started, having bought the land three years ago and endured a protracted application process with the local council. Therefore, the tax debt was proving to be a case of terrible timing and preventing the developer from exiting their current project, not to mention delaying the new one.
The client had recently signed up for a $2,000,000 tax debt arrangement with ATO to prevent further penalties. However, servicing the agreement was costly, and – with the bank now preparing to call in a maturing construction loan on his current project – he asked Agility to find a more cost-effective solution.
Agility looked at the developer’s books, credit history, and other factors like a bank. The primary difference was we also considered the ongoing housing development on the Central Coast. Business and the housing market in the area were positively booming, and the developer was very close to completion.
The developer’s construction finance was less than ideal. The bank had advanced 70% of Total Development Costs at the end of various construction phases, causing several delays during the project. Delays waiting for site inspections during the build had already compromised expected returns, adding to the developer’s exit problem. Not only that, but the bank had insisted on 50% pre-sales to approve the construction loan, which had reduced returns further when the developer was forced to sell luxury houses off the plan.
The delays had also put the developer in a place where he’d expected to have already exited the project, used profits to pay their tax bill, and be in the process of getting the new apartment project out of the ground. Instead, the developer found himself around six months behind schedule, down on profits, with substantial outstanding tax debt, and the bank ready to call in the construction loan. The lender had already flatly refused to extend the construction finance term.
Nevertheless, the developer contacted Agility with the bank deadline looming and the new project under threat. We considered everything, such as his existing project’s gross realization value (GRV). The developer was forced to sell half a dozen houses during pre-sales but had two more finished and yet to sell, meaning he was sitting on end value equity of $2.2M. He was able to pay off the $2,000,000 ATO debt entirely, avoiding further interest and the prospect of ongoing penalties.
The residual stock equity on the current project meant there would be no requirement for pre-sales on the new one, so the developer could sell as many apartments as possible after completion when he expected to achieve higher prices. In addition, during the three years that had passed since the developer bought the land, and because he had obtained a DA, the land value had increased by over $500,000. Agility helped him unlock that added equity and get the new apartment building well underway.



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